ECONOMY - A Tail of Two GMs

"The Ghosts of ‘Old G.M.’" by PAUL CLEMENS, New York Times 11/17/2010

Excerpt

IT is fitting that the Motors Liquidation Company — that portion of General Motors that was sliced off during its bankruptcy and so is not a part of the “New G.M.” that is having its initial public offering this week — has been shortened in common parlance to “Old G.M.” “Old” is the euphemism we use when talking about a closed auto factory, and Old G.M has plenty of old plants.

Some of these plants will find buyers and be put to new uses. But many — perhaps most — will not. They’re old and unwanted, and as I’m from Detroit, where one can’t help but develop a fondness for the forgotten, I find myself thinking of Old G.M. and its old plants even as press attention turns to the new company and the initial public offering that’s supposed to help it pay off the $40 billion it still owes the government.

I understand why Old G.M. has faded to the background, but my problem with the current news foreground is this: I can’t consistently remember what I.P.O. even stands for. And, while I know that they exist, I wonder, do I.P.O.’s actually exist? How would I recognize an I.P.O. if I bumped into one?

I.P.O. = Initial Public Offering (of stock)

I do know what closed auto plants look like, though, and I bump into plenty of them on my daily drives through Detroit. Depending on the day, I’ll pass by the old Continental plant, the old Budd plant, the old Packard plant and the old Fisher Body plant, among others.

For the better part of a year in 2007 and ’08, I paid visits to the old Budd Company stamping plant on Detroit’s East Side. Recently closed auto plants are sad places, enough to drive the sunniest disposition to dark thoughts. I was beginning research on a book, and while at that time a few big auto suppliers like Delphi were already in bankruptcy, we had no idea that the Chrysler and G.M. bankruptcies, and the Great Recession itself, were around the corner. “Carmageddon,” as it’s been called, was unthinkable.

The Budd factory had for more than 80 years produced brake drums, wheels and auto-body stampings for the major car companies. I spent most of my time there watching the plant’s press lines be taken apart to be shipped abroad — to Mexico, to Brazil. The cast of characters in the dismantling was equally international: Spanish, Portuguese and German were among the languages spoken, as well as English of various dialects.